GIC buys into $1.6b Melbourne office project

Aware Super and Amazon pre-committed to 555 Collins Street, at the corner of King.

Charter Hall has sold half a stake in the 555 Collins Street office project to Singapore sovereign wealth fund GIC.

The deal is subject to Foreign Investment Review Board approval.

It is the second recent major CBD play for the pair – coming four months since the $2.1 billion co-purchase of the Southern Cross complex.

That transaction was struck at a c4.5 per cent yield.

The latest is speculated to reflect an approximate four per cent capitalisation rate.

“We’re delighted to extend our 22 year partnership with GIC offering one of our Prime Office Fund investors the opportunity to co-own what we believe will be one of Melbourne’s pre-eminent new office products,” Charter Hall managing director, David Harrison, said.

555 Collins Street

Charter Hall paid $140m in 2018 for the 2300 sqm site making way for the first stage of the 555 Collins St project.

It was a tactical move, with the group holding the neighbouring 55 King St component – the Victorian Civil and Administrative Tribunal headquarters – since outlaying $78.5m two years earlier.

The 4635 sqm amalgamation was approved for a $1.6 billion redevelopment with two towers in 2020.

The biggest building will contain 48,000 square metres over 34 floors; Aware Super and Amazon recently committed to part of the space (story continues below).

Another 36,000 sqm is earmarked for the second tower at the corner of King St and Flinders Lane – stage two.

Both structures will flank lower level retail.

Colliers’ Tony Landrigan and Edward Knowles with JLL’s James Palmer and Alexandra Harper are the leasing agents.

“Our development and asset management teams have achieved leasing with major commitments from Amazon and Aware Super, whilst further leasing is well advanced, highlighting the bifurcation we have expected with tenant customers increasingly attracted to brand new, state-of-the-art space to satisfy the expectations of their people and customers,” Charter Hall Office chief executive officer, Carmel Hourigan, said.

“This partnership expansion with GIC provides further evidence of the value of prime real estate and of the commitment from our long-term partners to invest alongside our funds,” she added.

“The CPOF portfolio has grown beyond $9.5b…and represents the single largest office portfolio within the group’s $26b office platform,” according to the executive.

Last September, Charter Hall called in an investment partner – Victorian Funds Management Corporation – for a c$410m Burnley office set to be Australia Post’s headquarters.

VCAT’s lease at 55 King St expires shortly.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of